DESCRIPTION (Taken from the application): Wound healing and fracture repair in adult bone proceed via callus formation and an endochondral ossification sequence, where newly formed cartilage proliferates, matures, and undergoes hypertrophy, and is eventually replaced by the new bone that bridges the fracture gap. During this process, chondro- and osteo-progenitor cells are recruited to the damaged tissue site and are induced to differentiate in a s-atiotemporal specific manner to give rise to the regenerate endochondral. These progenitor cells are thought to be derived from local (not hematogenous) sources, i.e. they represent endogenous cell populations within the adult bony skeleton. While there is strong evidence that the bone marrow stroma and the periosteum both contain mesenchymal progenitor cells, our working hypothesis in this application is that multipotent progenitor cells, such as chondroprogenitor cells, are in fact also localized within the osteoid matrix of adult mature bone. This hypothesis is supported by our preliminary results that cells isolated from explants of fragments of adult human trabecular bone, traditionally denoted as "osteoblast-like cells", can be induced to differentiate into chondrocyte-like cells when maintained as an aggregate pellet culture, and secrete a sulfated proteoglycan-rich matrix containing collagen type I1. This induction of chondrogenesis is enhanced by factors such as transforming growth factor (TGF)-Bi or bone morphogenetic protein-2 (BMP-2), which have previously been shown to promote chondrogenesis in embryonic mesenchymal cells. We propose that these osteoblastic cells may represent a previously unrecognized population of multipotential mesenchymal progenitor cells. The Specific Aims are: 1 ) To identify and isolate chondroprogenitor cells from adult human trabecular bone; 2) To characterize the differentiation program of bone-derived chondroprogenitor cells; and 3) To determine the plasticity of the chondrogenic activity of bone-derived chondroprogenitor cells. Completion of these studies should clarify the characteristics and regulation of differentiation of a novel, chondroprogenitor cell population. This research will also determine if these adult trabecular bone-derived cells may serve as a progenitor cell source for cartilage engineering and repair.